[1]The US Senate Permanent Subcommittee on Investigations released a new report[2] this week confirming that a proposed tax amnesty for offshore corporate profits would repeat an “embarrassing failure[3]” by providing a windfall to multinational corporations while doing little to create jobs.

What the new report indicates is that a substantial portion of multinational corporations’ offshore earnings are really only identified as offshore to avoid paying taxes. The report surveyed 27 of the largest multinational corporations with a combined total of $538 billion in tax-deferred profits identified as offshore. What the survey found is that nearly half of the profits identified as offshore were actually held in US bank accounts or invested in US financial assets.

The results of the survey refute corporate tax amnesty proponents’ claims that US-based multinationals have more than $1 trillion in profits “trapped[4]” overseas because those corporations would have to pay federal corporate income taxes on those profits if brought into the US.

because undistributed accumulated foreign earnings are not trapped offshore. U.S. corporations are already investing nearly half of those foreign earnings in U.S. assets without paying any U.S. taxes on them, allowing those corporations to reap benefits from the U.S. financial system without paying the tax dollars needed to support that system. Enacting still another corporate repatriation tax incentive would further exacerbate that tax unfairness.